Singapore Airlines 2014 Annual Report Download - page 116

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NOTES TO THE FINANCIAL STATEMENTS
31 March 2014
SINGAPORE AIRLINES
2 Summary of Significant Accounting Policies (continued)
(g) Foreign currencies (continued)
All foreign currency monetary assets and liabilities are translated into SGD using year-end exchange rates. Non-
monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using
the exchange rates as at the dates of the initial transactions. Non-monetary assets and liabilities measured at fair value
in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
Gains and losses arising from conversion of monetary assets and liabilities are taken to the profit and loss account.
For the purpose of the consolidated financial statements, the net assets of the foreign subsidiary, associated and joint
venture companies are translated into SGD at the exchange rates ruling at the end of the reporting period. The financial
results of foreign subsidiary, associated and joint venture companies are translated monthly into SGD at the prevailing
exchange rates. The resulting gains or losses on exchange are recognised initially in other comprehensive income and
accumulated under foreign currency translation reserve.
Goodwill and fair value adjustments arising from the acquisition of foreign operations on or after 1 April 2005 are
treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign
operations, and translated into SGD at the closing rate at the end of the reporting period.
On disposal of a foreign operation, the cumulative amount of exchange differences deferred in other comprehensive
income relating to that foreign operation is recognised in the profit and loss account as a component of the gain or
loss on disposal.
(h)฀ Property,฀plant฀and฀equipment
All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition, property, plant and
equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. The cost of
an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.
The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costs
of bringing the asset to working condition for its intended use. The cost of all aircraft is stated net of manufacturers’
credit. Aircraft and related equipment acquired on an exchange basis are stated at amounts paid plus the fair value
of the fixed asset traded-in. Expenditure for heavy maintenance visits on aircraft, engine overhauls and landing gear
overhauls, is capitalised at cost. Expenditure for engine overhaul costs covered by power-by-hour (fixed rate charged
per hour) maintenance agreements is capitalised by hours flown. Expenditure for other maintenance and repairs is
charged to the profit and loss account. When assets are sold or retired, their costs, accumulated depreciation and
accumulated impairment losses, if any, are removed from the financial statements and any gain or loss resulting from
their disposal is included in the profit and loss account.
Leasehold hotel properties held by an associated company are carried at fair value, less accumulated depreciation and
accumulated impairment losses. Fair values of leasehold hotel properties are determined by independent professional
valuers on an annual basis. The Group’s share of the revaluation gain or loss is reflected under the share of
post-acquisition capital reserve.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit and loss
account in the year the asset is derecognised.